Apartments in Stockholm. Photo: Hasse Holmberg / TT.
Building for a hard landing? Photo: Hasse Holmberg / TT.
All-time high margins

Banks making "all-time high" margins on mortgages: watchdog

"Margins at the moment are at an an all-time high."
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Swedish banks are currently enjoying "all-time high" profit margins on mortgage lending, the Swedish financial regulatory authority said today.

"Margins at the moment are [...] at an all-time high. Today we presented [figures] for the first three months of 2017, and compared to the previous quarter, the average margin was higher and we saw the all-time high margin of 1.74 per cent during January," Finansinspektionen (FI) analyst Henrik Larsson tells Radio Sweden.

"This tells us that banks are making good profits on mortgages, and one risk associated with this could be that the growth of household debt will continue to increase," Larsson explains.

"Growth of household debt is already very high in Sweden, and has been so for a very long time. Households are using their loans to buy housing, so increased debt will probably increase house prices as well," he said.

The quarterly FI survey calculates gross profit margins on mortgages: the difference between lending rates paid by households, and what the banks pay to finance mortgage lending.


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